Building a reputation through customer reviews

The absolute dependency on customer feedback for building reputation in businesses that do not have a high street presence has raised the bar in the online world

A few weeks ago I ordered a book through Amazon. I’m a regular purchaser of books on the site as living in Spain there isn’t the same range of books in English available and they tend to be more expensive – a simple case of supply and demand.

However, for the first time ever on Amazon, my book didn’t arrive on or before the delivery date given. I waited a few more days before clicking on the link in the confirmation email which brought me to a page where I could email the seller directly. This is what I did and a few minutes later I got a reply expressing sincere apologies and also asking if I wouldn’t mind waiting another ten days for the book to arrive. The alternative was that they would issue me a refund immediately. I told them I would wait and the book arrived a few days later. So my book arrived a few days late but that doesn’t mean that I wouldn’t use that seller again. In fact, I would probably be more likely to look for and trust that seller as I know they take their reputation very seriously even though they already had a 4.7/5 rating from over 27,000 reviews and one negative one was hardly going to make a difference. In any case, I gave them a 5 star rating as the whole process was handled efficiently and to my complete satisfaction.

5 stars

I am sure you can recall several examples of purchases you made in-store needing to be returned and you didn’t get the customer service response you were hoping for. Perhaps you even had to fight for your rights and make a complaint. The fact is that customer service in the online marketplace, particularly in the well-established platforms, now outshines that of the high street. Why is that? The absolute dependency on customer feedback for building reputation in businesses that do not have a high street presence has raised the bar in the online world and the instant availability of customer reviews are the reasons. The leisure industry has realised this to a certain extent and actively pursue positive ratings on sites such as TripAdvisor.

Online sellers on sites such as Amazon and eBay depend on their reputation. Without it they don’t have a business. “Building reputation” for sellers is the business of these web platforms. The advent of online selling in the late nineties was a revolution in the retail sector and eBay quickly realised that the absence of any physical contact between buyer and seller would be a major threat to their model as trust was previously very much established through physical contact i.e. at least you knew where the store was. Using reviews to build reputation in a global market was key and even more so than the need for secure payment technologies. Customer reviewing has become so integral that it has its own market.

So why then have companies in other sectors, particularly those with both an online and high street presence, not taken on the challenge of building their reputations through customer reviews?

Take the telecommunications sector for example. Mobile devices, internet services and home entertainment have changed radically in the last decade and the pie that has to be shared is estimated at €1.2 trillion globally in 2014 and growing at 3% per year with 3.9 billion subscribers. Much of this shopping is done on the high street with the research being done online. Customers may have already chosen the device they want but the provider becomes important after this. Will I get the broadband speed I am paying for? Is their 4G service really going to give me superfast download speeds on the move? What happens when I pay for the product, will it arrive on time and will they respond quickly when the service breaks down? The list goes on.

At this point in your decision making process you would really like to hear what other customers have to say, yet providers do not provide any such opportunity.  I would suggest this due to the lack of competition among providers and apathy in some countries. In Spain, where I live and work, both of these certainly apply. A company that decides to expose itself publicly to the opinions of its customers may actually find long term benefits if they are willing to truly focus their efforts on what they actually want as opposed to what they think they want to give them.

By the way, the book I ordered and which I am finished already, is “The Culture Map” by Erin Meyer. It’s about business communication in global teams which fits nicely with courses we are designing for company executives and business students. It’s a highly recommended read.

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